The Turkish lira has plummeted to a record low against the US dollar. Such a dynamic mirrors the market disappointment at the latest central bank’s measure taken to reinforce the national currency as well as political uncertainty ahead of the parliamentary election. Meanwhile, the Turkish lira has tumbled below the crucial level of 2.7339 against the US dollar. The Turkish currency has been under pressure this year in anticipation of the US Federal Reserve announcement on the key interest rate hike. Such measures from the US watchdog will inevitably lead to the capital flight from emerging markets. Besides, the lira is depressed due to the political pressure on the central bank. Analysts think that Turkish officials pursued an imprudent soft monetary policy and did not adopt appropriate measures to underpin the national currency. The Turkish lira has fallen 17% in value against the greenback since early 2015. On the whole, the lira has been among the hardest-hit emerging market currencies. Meanwhile, the monetary policy committee of the Turkish regulator kept interest rates unchanged at its Wednesday meeting in Ankara. Experts believe that failed attempts to halt the lira depreciation could enable policy makers to venture into a tighter monetary policy, in particular raising the key interest rate. Turkey’s President Recep Tayyip Erdogan and some ministers demanded that the central bank should not decrease borrowing costs so much with a view to bolstering economic growth.
